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Nintendo sold fewer than 500,000 units of its Wii U console in the last six months, though favourable exchange rate saw the company turn a small profit.

Despite the launch of key first-party titles like Pikmin 3 and The Legend of Zelda: The Wind Waker HD, Nintendo failed to gather some much needed momentum around its faltering console. In the six months ended September 30, 2013, the Wii U hardware sold 460,000 units worldwide, along with 6.3 million units of software.

This actually represents a relative improvement in performance: the Wii U sold only 160,000 units in the first quarter of the six-month period, meaning that it almost doubled sales in the second quarter. However, thanks to a price-cut on the hardware that increase hasn't helped the company's bottom line.

"The Wii U hardware still has a negative impact on Nintendo's profits, owing mainly to its markdown in the
United States and Europe," Nintendo said in a statement released today.

The company reported an operating loss of ¥23.2 billion ($236.2 million) for the period, which it attributed to "advertising activities" for the Wii U and research and development for new software. The amount invested in these pursuits was not given, though the fact that Nintendo made a gross profit of ¥62 billion ($631.4 million) for the period gives some idea of the scale.

Nintendo booked ¥196.6 billion ($2 billion) revenue during the six-month period, down 2.2 per cent on the previous year. Net profit was ¥600 million ($6.1 million), a relatively small sum but a massive improvement over the ¥28 billion ($186 million) loss a year before.

However, Nintendo suggested that its return to profit was largely due to a favourable depreciation of the Yen, leading to "exchange gains" of ¥18.3 billion versus the same period in the previous year.

But it's not all gloom and doom. The 3DS remained Nintendo's driving force, selling 3.89 million units and a further 27.38 million units of software. The platform's top performers included Tomodachi Collection with 1.63 million units sold and Animal Crossing: New Leaf with 2.49 million.

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37 Comments

I really hope that Nintendo have a plan B. Otherwise they are in very severe trouble.
Mobiles and tablets will cannibalise their 3DS market. Then they will be left with nothing. Except, of course, a whole catalogue of some of the most significant properties in gaming.
Their future, their survival even, depends on how they go about leveraging these properties on future platforms.

@ Tenchi There are ~5 million Wii U owners in total, and they purchased that software, not just the people who bought the system in those 6 months.

The impact of the price drop and Zelda launch is hardly visible from just a single month. Saying it "failed to gather momentum" is pretty silly until we see how the Wii U does in the current holiday quarter. It's not that i expect it to do amazingly well this quarter, but you're making a lot of analysis on half a month of data.

"Despite the launch of key first-party titles like Pikmin 3 and The Legend of Zelda: The Wind Waker HD, Nintendo failed to gather some much needed momentum around its faltering console."

That doesn't sound right, Wind Waker isn't even out yet in most key territories. The data covers six months ending on September 30th, but the Wind Waker HD was released in Japan on September 26, in Europe and North America on October 4, and in Australia on October 5, 2013.

Meanwhile, in other GI biz news, let's talk about How Sony Can Win the Next-Gen War, a company who "couldn't afford to lose".

Insane? Not really. Whilst the WiiU might be costing them, they know that Wind Waker HD hadn't released in all territories in the time-frame covered by this report. Plus, there's the 2DS, and continued sales of the 3DS. It might be the slightly optimistitic side, but the Thanksgiving and Festive seasons have yet to play out, so I don't think it's crazy. :)

Edited 1 times. Last edit by Morville O'Driscoll on 30th October 2013 1:53pm

How can Sony win? With both Nintendo and MS making a run for other niches to survive, Sony needs to leverage its biggest strength: making friends and allies. Build industry standards nobody can afford to ignore.

Speaking more radically, clinging at trying to leverage a proprietary OS is as doomed as clinging to MiniDisk was. The Kernel of truth is, there are no two linux consoles, one by Sony, one by Valve. There is only one hardware manufacturer ailing to keep up the software side of its services and one software company sticking their feet into hardware waters.

Naturally, the same could be said for all competitors in this market. Think of yourself as brilliant and try surviving by standing alone, or team up to face the chaotic onslaught that is today's gaming landscape, from mobiles to PCs, from big productions to kickstarters, from f2p to retail games, from social webs to paid media services. The whole avalanche of today's digital life that comes crashing at the consoles doorsteps. Consoles which sometimes already seem like relics the day they are released and only "do everything" in fancy ad campaigns.

Really? B/C 7 of the 9 paragraphs of the article read like it is.
You didn't lead with profit.
You didn't lead with the 3DS and how it is the best-selling game console in every territory so far this year.
You picked out what isn't going well and focused the article on that.

It reads incredibly biased w/an agenda.
Based on the comments it appears to be hitting the mark, no one is talking about the positive, they've focused on doom and gloom.

It used to be these articles would talk about the 3DS failure and disaster. Now that it is a success it is mitigated to paragraph number 8 so that we can sweep success under the rug and STAY FOCUSED on the MESSAGE. The message is doom and gloom, DO NOT look at the man behind the curtain!
I'd say well done, mission accomplished!

Nintendo may be down in the dumps now, the good thing is that they keep a sustainable business model incase of a failure. They have kept there company operation costs much lower than what they profit from, so they can take a few hits before going down.

Unlike most companies, that put all there money on one game, and if it tanks the whole company goes down under.... Nintendo keeps a sustainable business that can withstand a few failures. They are in a position to re evaluate there business and market position and can come back from this. However they have a very good line-up of software coming for christmas, and im using part of my christmas bonus to buy a WiiU. I pursonally am chasing after a bundle with Super mario/Luigi Bros WiiU. And they announced both games together on a phisical disk bundled with a premium black version of the console.

So yeah they answered my wishes with that. Bayonetta 2 also looked awsome. As good as anything PS4 and XB1 are churning out, plus both XB1 and PS4 will have a software drought at launch since many high profile third party games were delayed until 2014. Finally I wasnt too enthusiastic about SM3DW... but the last two trailers have got me pretty excited for the game. Besides, most of the games from Microsft and SONY are first person shooters. Nintendo fills a certain void with there line up of games. On top of that they have a very profitable and succesful handheld business they can lean on.

Nintendo gets alot of slack. But I wouldnt count them out yet. Look at how they turned the 3DS around. And they were in worse shape with the N64.

Nintendo is fine today. The problem most of us are looking at is their archaic business model, their underpowered hardware, and complete obliviousness to the way the console market is evolving. The DS is a ruggedized $249 ipad mini awat from serious trouble, and the WiiU can barely get the faithful moving. $6 billion nest eggs are great, until you burn them supporting failing hardware and buying third party support. Which is what Nintendo is doing right now. I don't even think that if they really lit the fire and dropped to $199 it'd get them appreciable gains.

So without a drastic change from top to bottom in how they do business, a lot of us see they're circling the drain, it's just a big pool

@ Jeff Considering Apple's most recent iPad Mini actually went UP in price to $400, and is anything but rugged, I doubt Nintendo with their $130 2DS gives two craps.

Nintendo's "nest egg" (liquid capital alone) is still over $10 billion. The entire damage done by the Wii U has decreased it by less than $1 billion. This pool you're talking about them circling would have to be an ocean, and since Nintendo is still ADDING profit it's an ocean that keeps getting bigger.

The only money Nintendo invests in outside games is in direct development for their platforms, not "buying third party support." If they were buying third party support there would actually BE third party support on Wii U, and the third party support on the 3DS is clearly naturally generated by the platform's massive success. Success it has a achieved on an "outdated business model" with "underpowered hardware" while the much more "advanced business models" and "powerful hardware" falter in its shadow. Success that is only picking UP steam, and not slowing down in the slightest.

So, maybe you should consider A) basing your opinions on actual facts and B) have some evidence aside from ONE struggling platform and your anecdotal "But wait till Apple makes a cheap iPad!" rhetoric that every anti-Nintendo drone has been spewing since 2010, to no avail.

Considering unsubscribing from the newsletter because I'm getting a little tired of all the 'Nintendo is failing' posts. As far as the 3DS goes, it's just outsold the N64. It's on its way to outselling the NDS, too, I presume. Look at all of Nintendo's consoles. They've always had such slow starts, only spurred on by early adopters. I admit the Wii U has had an unfairly rocky start, but what do you expect when you released it at the same time as the two logger heads from Sony and Microsoft announce their expensive paperweights?
The Nintendo DS? No-one knew about it for at least two years. I was 13 years old, with a chunky launch silver DS original and no-one around me knew what it was. No-one around me got one till the DS Lite came out, some waited even for a DSXL. Same for the 3DS - now everyone has one but I was there at midnight queuing for a launch console. Now look at it.
Why not, instead of reporting the loss of Nintendo's sales on the Wii U, talk about a really failing console, such as the Vita? Or is that selling so few that it's not news worthy?
I only just bought my Wii U due to me holding out for a Zelda edition (since they announced Wind Waker I was gunning for one, and hey presto) and I must say, what a lovely console! I see a lot of potential in its future, and yet again Nintendo have proven it's not about graphics, horse power or how many frames per second you can jam in some faceless FPS, but about the overall joy and experience from their games. I'll be playing my Wii U for a long time before I so much as glance at a PS4 or Xbone, their games are somewhat tepid right now, I'm thoroughly fed up with the dull shooting games that companies still seem to think are cool. Looking at their lineups makes me yawn greatly. Now, back to the Great Sea! :)

3.90 Million Units shipped and we don't even have the major Mario game, Mario Kart or Smash Brothers.
Christmas is coming, chill. All the little ones who have been playing Minecraft for a year now need a new platform. A smart parent will now migrate them to a Wii-U with Super Mario 3D World.

Thanks for the reply. Unfortunately I don't have kids yet, so I don't know whether I'd trust my kid with one or not. ^^;

Also, on the one hand you're saying that kids want iPads, not 3DS', but then on the other hand you seem to be implying that parents don't want to give something so fragile and expensive to their kids, so I'm not entirely sure what the argument there would be. For Nintendo, or against? Or perhaps something completely different?

That being said, I was asking Bruce just to clarify what his position is. I think we all know by now that he sees mobile/tablet as the end-all-be-all of gaming and consoles/retail as all but extinct. (And as much as I respect his position, I feel that the overall amount of money spent at retail vs. digital for consoles shows a different picture.)

I wonder how many people here OWN a Wii U and how many just looked at it and thumbed down without a try somewhere. For me, part of the system's major issues are Nintendo not doing a great job explaining the thing to a confused user base who thought it wasn't an actual console but a controller, part not having a better launch and launch window lineup, part lukewarm response about some third party games by critics and a few other things (yes, pricing on some of those ports, which is justified because well... it ain't cheap to make them, kids!) that all add up to slower than expected sales.

I also think that Nintendo misunderstood the huge casual market the Wii captured in a HUGE way, thinking more of these users would get more into gaming outside of their initial purchase and become more "core" than "casual", moving on to the Wii U as a natural progression. Not all those folks buy games on the same schedule as more hardcore users, so a LOT of Wiis were selling, but it seems that outside the big first party games that got major ad and TV show time as must-haves, there were many other quality releases that didn't do much until they hit the bargain bin or were sold as cheaper used copies.

And I'm going to get CRU-CI-FIED for saying this, but I also think in a weird, wild way, the 3DS' huge success has hurt the Wii U somewhat significantly because Nintendo didn't figure out a way to get it and the Wii U to play nice together. I know of some disappointed Nintendo fans who own both will always find comfort in a 3DS game when they're waiting for Nintendo's dev teams to get something they want on the new platform (and of course have to deal with whatever delays pop into the frame). Great games are here and coming, but it's a slow trickle compared to the competition this season and into the holidays.

I said this before and here we go again: I don't see how Nintendo figured that NOT having at least a new Pokemon, Animal Crossing, and other key (non-Mario) games either ready or arriving in the console's first year would be a good thing when they're licenses to print money from day one. Pikmin was and is a niche game, Wind Waker is brilliant, but it's still a heavily tweaked remake (that should do well, but they had to drop the price of the system AND pack it in, but may sell it twice to some collectors who want physical copy), Metroid is MIA, Kid Icarus would have been more enjoyable in HD on that GamePad and so forth and so on.

I'm far from giving up on my Wii U like some folks condemning the console, as I feel Nintendo can make it an "evergreen" system provided they get MORE content on that eShop, have a more consistent release schedule and show off some actual surprises at E3 (well, that Nintendo Direct E3 video) next year. Mario Kart and Smash Bros. should be hits of the usual order, but I think Bayonetta 2 will under-perform outside of its niche as it's probably going to be M-rated and I'd gather the larger family units will pass on the sexy for more Mario and such. We'll see, but I don't think the system is "dead" or "dying" by any means...

Although an improvement these Wii U numbers are far from impressive. The system is not only going to be judged by how it does on it's own during the holidays but also by how it does in comparison to the XB1 and PS4. I'm still giving Nintendo the benefit of the doubt until January when we have some hard sell thru numbers during the holidays. But so far things continue to look pretty gloomy.

Good posts Nicholas. Given you have a good eye for numbers, how many of the 8.54 million Wii U's Nintendo need to shift to hit their target do you think they'll manage? Given Nintendo shifted 7.5 million (ish) 3DS units last quarter 3 without releases as strong as Pokemon, Zelda or 2DS, I think they've a good shot at their 3DS target... but that Wii U target seems to rely on a Christmas runaway success story I don't see coming. I see a substantial improvement, sure, but 8.54 million in six months??

@ Daniel They won't hit their target. I suspect Nintnedo will manage 4.5 million units through the holidays on the back of Mario and Zelda plus another 1-2 million over the remaining quarter, putting them at around 6 million of their 8.54 million forecast, but it's hard to say. We have very little evidence as to the future of the Wii U this holiday. We haven't gotten a full month of sales with the price drop, and the Wii U's software lineup and increased ad campaign should theoretically make the holidays stronger for them this year than last year, but it's all speculation. It could do significantly worse than I'm predicting, or slightly better.

Their advantage is that they DO have the best holiday software lineup for a home console and the lowest price. Their disadvantage is the "newness" factor of its competitors and the fact that the 3DS is so dominant with such a massive library and an amazing price that it will poach Nintendo's own fans away from the Wii U.

Edited 1 times. Last edit by Nicholas Pantazis on 31st October 2013 2:14pm

My point is more that parents won't give the kid an ipad until the cost of replacement, and the likelihood of that being necessary are a lot closer to current 3DS prices and durability. When I was a kid I wanted a Walkman. My parents bought me a radio only one until improved I could take care of it, and until the price on cassette ones came down sufficiently they didn't worry if I dropped it on my bike. Same thing.

They just had to pay $6-10 million to Activision to get COD Ghosts released. That's buying third party support. Something to do with no one buying Black Ops 2. This money, whatever form that support takes was to cover the port and production costs.

My opinions are backed up by facts. I just look at the bigger and future picture while you look at the now. I look at published studies like the "what kids want" lists, and studies of my own. It isn't a "you just wait", it's simply a fact based on the simple question, which was asked hundreds of parents of elementary and middle school age children what they do and don't buy their children and why. The console business stopped being just about games 7 years ago, and people need to look at the big picture. Nintendo will have the faithful, but no responsible set of stockholders lets a company take multimillion baths without something to show for it. Microsoft will give Surface RT one more go a best for example, before concentrating on the much more successful Pro line.

So please, look at the big picture and not just the now. New consoles are much more expensive to support, and $10 billion will go awfully fast when they have competition the kids want. I've linked you to the external studies by major firms before, if you want to discount them that's fine, but please don't call it rhetoric.

@ Jeff You have no evidence for Nintendo paying for Call of Duty. Neither Activision nor Nintendo have made any claim to that effect. Please don't make things up.

Published studies of what kids want are not a measure of success. "Kids want" lots of things that aren't game consoles, and polling is far from scientific. If you think polls are the same as hard numbers, let's take a look at the Nielson poll from last year, shall we? iDevies stay on top, no surprise there. What's this? The Wii U is in second? But I'm pretty sure the Wii U didn't outsell every other platform last year. In fact, the sales order for platforms during the holidays last year was: 3DS > Xbox 360 > PS3 > Wii U. It's almost like that poll is completely meaningless. It's as if that poll is only testing one small demographic of one territory through a completely unscientific method. But no, surely that's good evidence for the future success of entire companies. Much better evidence than the actual sales. Read more on this is in Rob's excellent article from last week here.

Stockholders are largely irresponsible in general. Sony and Microsoft both bled billions of dollars over the last generation (almost $8 billion in losses between them). Far more than Nintendo is at any risk of losing now. Letting them continue down the same "Push the tech, rule the living room!" path would be far more irresponsible than letting Nintendo keep selling hardware at a profit and remain solvent. If Sony can "only" lose $5 billion on the PS3 with their massive mistakes in pricing, production costs, and missed sales expectations, I'm pretty sure Nintendo losing $1 billion on the Wii U isn't going to destroy them.

I don't think Nintendo has anything to fear with a highly successful 3DS keeping them running quite well alongside the floundering Wii U. If the Wii U totally collapses this holiday and Nintendo never makes it out of the rut, they still have plenty of money to make the same mistake 3 or 4 more times before we're anywhere near a "Nintendo bankruptcy," and that's only taking into account Nintendo's liquid capital. Keep in mind Sony, much worse financially, is already to the point of selling off buildings to remain solvent. So no, I don't think what you're saying has any grounding in reality, nor any understanding of present or future financial situations.

As for Microsoft, believe it or not the Surface Pro did not perform well either. It was well-received, but sales were far from stellar. Microsoft has lots of money, but they haven't been able to expand their market in any direction successfully in more than a decade, and Windows 8 is no exception to that.

Edited 1 times. Last edit by Nicholas Pantazis on 31st October 2013 2:06pm

Fair enough. I guess that means Nintendo has more potential to sell to kids than Apple at this stage in the game. Unfortunately, it's been a while since I've been back to the States so I don't really know what kids are playing with these days.

before we're anywhere near a "Nintendo bankruptcy," and that's only taking into account Nintendo's liquid capital. Keep in mind Sony, much worse financially, is already to the point of selling off buildings to remain solvent.

To further add to this, while Sony is selling buildings - one in NY and one in Tokyo - Nintendo is in the process of building a new, massive R&D facility.

Not only are they not in any danger of bankruptcy (nobody with any financial knowledge should even entertain the notion) but they are apparently gearing up for a fight.

Yes, because such things are formally announced back room deals like this are made all the time, typically filed under "advertising support" and other euphemisms That's why you need to look into things instead of taking everything at face value. That kind of thinking works great when you're crunching numbers at VGChartz, but it's not in these kinds of cases

Let me share with you one of these cases that became public. In a desperate attempt to get some legs under HD DVD, Microsoft and Toshiba paid Paramount and DreamWorks a split $150 million in "advertising support", immediately after which they "decided" to stop supporting Blu-ray. After which, sales on the now-exclusive Transformers did not show desired sales results, and HD DVD attempted to put in the fix and got caught.

So as I said, these kinds of deals are commonplace. There was no WiiU version until Nintendo made it worth their while to make it. Do you think EA and Respawn made Titanfall exclusive because they think X1 is the only place their vision can be realized? Your own site shows 200k global copies for Black Ops 2 WiiU. The multiplayer is and has been a ghost town, and since the other publishers seem to be leaving WiiU out of their DLC picturesque, the major monetization of the title incentive is also removed because there aren't enough people to buy it. Activision is waiting and seeing if things change. The season pass is hundreds of millions of dollars to Activision, and it costs millions to port the maps. Not worth putting in the investment with history showing such a small and I engaged user base.

So stop accusing me of rhetoric and fabrication, and read the links provided and think before a response. I realize you're a Nintendo fan, but please stop letting it color your world You keep ignoring the parts where I explain my statements, like where I explain why the kids ARENT getting iPads and how that can change very quickly. You keep citing what is true today, while I'm looking a a decade down the road. Ten years ago THQ was on top of the world. Where are they today?

Porting the game would take only a few months, it's not like developing a new game. I'm sure some work had already been done

Cost of porting to WiiU from 360 has previously been said to cost around $5 million for AAA,factoring in disc production and incentives. Please read the entirety of my post rather than cherry picking. I explained everything

@ Jeff I think it's pretty obvious to everyone reading this topic that you are making wild accusations with no evidence to prove your point, and pointing out that deals have been made for exclusives in the past is not evidence of a deal made for support in the present, especially when it's a practice Nintendo has NEVER engaged in as a matter of philosophy. But, that's fine, keep rambling. You are your own worst enemy at this point.